Deutsche Bank: There seems to be an increasing demand to use Bitcoin, more than gold

According to analysts at investment bank Deutsche Bank based in Germany, Bitcoin appeal as an alternative store of value assets is growing. Specifically, it looks like the demand for Bitcoin is rising, up 144% this year as gold has only grown 22%.

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Deutsche Bank: Bitcoin appeal as an alternative store of value asset is strengthening

Bitcoin has long been regarded by proponents as digital gold due to its limited, predictable supply and uses cases as a store of value outside of bank influence.

While Bitcoin is up 144% this year, gold is up 22%. Both assets appear to have benefited from the inflation-boosting fiscal and monetary policies put in place by central banks and governments around the globe to prevent an economic slowdown from the Coronavirus pandemic.

Jim Reid, chief executive of Deutsche Bank, said:

“There seems to be an increasing demand to use bitcoin where gold used to be used to hedge dollar risk, inflation, and other things.”

Cryptocurrencies are up more than 25% just this month despite hopes for a rapid global economic recovery thanks to potential coronavirus vaccines and an improved risk appetite in the stock market. However, gold has maintained its reputation as a haven asset, dropping 1% this month.

According to Reid, the divergence between gold and silver, on the other hand, Bitcoin has been one of this month’s oddities. US-based drug manufacturers Pfizer and Moderna announced encouraging results for their experimental coronavirus vaccine earlier this month, triggering a cash flow from gold and shelter assets other and transfer to risky assets.

Reid told Bloomberg earlier this month that the coronavirus vaccine is the equivalent of a global financial stimulus. “Inflation is likely to rise moderately between 2021 and 2022, which is good for stocks and gold,” said Christian Nolting, global chief investment officer at Deutsche Bank Wealth Management.

At press time, Bitcoin is trading close to $ 17,706, while gold is changing hands at $ 1,860 per ounce.

You can see the BTC price here.

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